Is customized advertising economical

Personalized advertising: advantages and disadvantages for your company


What is personalized advertising?

The advertising market share of online advertising is increasing more and more worldwide. According to a study by Zenith, it will be 40 percent in 2018 and the potential has still not been exhausted. So it's no wonder that advertising on the Internet is increasingly being adapted to the individual surfing behavior of users.

In the case of personalized advertising, the behavior of people on the Internet is analyzed using cookies, browser and device identification. You will then be shown advertisements that exactly match your previously viewed content. Thus, for example, online shops can create targeted advertising for individual customers that is precisely tailored to their needs and interests.

Use different types of personalized advertising

Targeting is advertising that is aimed at specific audiences. There are different methods that we would like to explain to you using an example: Let's assume that we decide to place personalized advertising for toothbrushes. Then we can choose from these variants:

  • Content targeting: The advertising is only shown on websites with the same content. Our toothbrush advertisements are only shown on websites that deal with toothbrushes.
  • Semantic targeting: The advertisement will also be displayed on websites with similar content. The buyer also gets the advertising of our toothbrushes leaked on websites that deal with hygiene articles.
  • Behavioral targeting: The content of the websites visited and the interaction with the advertising banners is used for the personalization of advertisements. The user generally receives advertising from toothbrushes due to his surfing behavior.
  • Retargeting: The lost customers are shown products that they were previously interested in again. A potential customer put our toothbrush in their shopping cart online, but did not buy it. Now, while surfing other websites, advertisements for our toothbrush are suggested to him as an offer.
  • Social media targeting: This means that personalized advertising can also be displayed in private social media profiles. The user has liked our manufacturer's page on Facebook and is thus shown our toothbrush advertising in their chronicle.
  • Psychographic targeting: The behavior of the users is analyzed on the basis of their profile and the corresponding targeting is displayed accordingly. The potential buyer often surfs on Amazon and prefers cheap offers. Accordingly, he receives the advertisement of a cheap toothbrush from Amazon.

Make the most of the benefits of personalized advertising

  • You can respond to the individual wishes of individual customers with personalized advertising.
  • This means that your customers do not have any information that is undesirable. This way you “scare off” fewer visitors to your website.
  • As a result, users will build a better bond with your brand.
  • Targeted personalization of the advertisements can prevent a “flood of information” that is perceived as annoying. Often users do not immediately decide on a product, but need some time to think about it. Personalized advertising enables your offer not to be forgotten.
  • Mobile advertising enables all data to be accessed while the user is online via smartphone. For example, time and place can be included in the analysis, which enables even more targeted advertising.
  • All of this leads to an increase in the conversion rate and therefore your turnover.

Can personalized advertising also have disadvantages?

  • Expenditure: If you want to place personalized advertising, you have to note that this process involves a certain amount of effort. In addition to time and money, you need to plan in regular maintenance for updates. In principle, however, the placement of advertising is always associated with effort and whether you place advertisements in a personalized or non-personalized manner makes no noticeable difference in practice.
  • Note data protection: It is important to observe the data protection guidelines. You may only use data for the analysis if the user has given his prior consent and if it is unproblematic.
  • Technical hurdles: There are various technical methods that the visitor can use to prevent you from reading their data. No personalization is possible.
  • Fear of data abuse: In addition, many people are afraid of data abuse. According to a survey by Statista, 50.7 percent of users reject personalized advertising.
  • Display of "wrong" products: The advertiser can also misuse personalized advertising. For example, if a man has looked for a present for his wife in an online shop, similar products for women will still be displayed to him days later, even though he as a man is not interested in them.

Example Google: This is how personalization works on a grand scale

Google is the world's largest search engine and therefore the best platform for placing personalized advertising. In contrast to social networks such as Facebook, the user does not have to provide any personal information here. How does Google then know where you live, what gender you are and what topics interest you?

The answer is pretty obvious: data analysis. All data that users enter in the search bar is recorded and evaluated. Do you remember what you've ever Googled? If not, no problem. Anyone can easily see this and change it accordingly:

* Link only works for logged in users

Conclusion: The advantages of personalized advertising outweigh the benefits

With personalized advertising, your company can significantly reduce wastage. Your ads reach the target group with the potentially greatest interest in the marketed product. This is how you increase your sales and your profits.

You should be aware that the use of personalized advertising poses legal, technical and content-related challenges. If you plan in sufficient capacity for this, you should definitely take advantage of this opportunity.